**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**




**FORM
      10-KSB**





x
      ANNUAL REPORT PURSUANT
      TO SECTION 13 OR 15(d) OF


THE
      SECURITIES EXCHANGE ACT OF 1934




**For
      the fiscal year ended December 31, 2007**




OR




o
      TRANSACTION REPORT
      PURSUANT TO SECTION 13 OR 15 (d) OF


THE
      SECURITIES EXCHANGE ACT OF 1934




For
      the
      transaction period from ________ to ____________





Commission
      file number 1-316





**INDEPENDENCE
      LEAD MINES COMPANY**


(Name
      of
      small business issuer in its charter)


ARIZONA
              
              82-0131980(State
                  or other jurisdiction
              
              (IRS
                  Employer Identification No.)of
                  incorporation)




**P
      O BOX 717**


**WALLACE,
      IDAHO 83873**


(Address
      of principal executive offices )





Issuer’s
      telephone number: **(208)
      753-2525**





Securities
      registered pursuant to Section 12(b) of the Act: None





Securities
      registered under Section 12(g) of the Exchange Act:





Common
      Stock,


Par
      Value $0.10 per Share


Title
      of
      each class





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. o





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days.    Yes
x
      No o


Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act)


Yes
x
      No o




State
      issuer’s revenues for its most recent fiscal year. None





As
      of
      February 29, 2008, the aggregate market value of the voting stock held by
      non-affiliates of the registrant was $55,786,707.





The
      number of shares of common stock outstanding as of February 25, 2008 was
      5,780,737.





Transitional
      Small Business Disclosure Format (check one): Yes o No x





Documents
      Incorporated by Reference: Form
      8-K,
      as filed February 13, 2008 and February 21, 2008, and as amended March 12,
      2008. See
      also
      index to exhibits, page 17.











TABLE
      OF
      CONTENTS


PagePART
                    IItem
                    1.
                
                Business
                
                3Item
                    2.
                
                Properties
                
                7Item
                    3.
                
                Legal
                    Proceedings
                
                7Item
                    4.
                
                Submission
                    of Matters to a Vote of Security Holders
                
                8PART
                    IIItem
                    5.
                
                Market
                    for the Registrant’s Common Stock and Related Stockholder Matters
                
                8Item
                    6.
                
                Management’s
                    Discussion and Analysis of Financial Condition
                    and Results of Operations
                
                10Item
                    7.
                
                Financial
                    Statements
                
                12Item
                    8.
                
                Changes
                    in and Disagreements with Accountants On
                    Accounting and Financial Disclosure
                
                12Item
                    8A.
                
                Controls
                    and Procedures
                
                12Item
                    8B.
                
                Other
                    Information
                
                13PART
                    IIIItem
                    9.
                
                Directors,
                    Executive Officers, Promoters and Control Persons  and
                    Corporate Governance; Compliance with Section
                    16(a) of the Exchange Act
                
                13Item
                    10 .
                
                Executive
                    Compensation
                
                15Item
                    11.
                
                Security
                    Ownership of Certain Beneficial Owners
                    and Management and Related Stockholder Matters
                
                16Item
                    12.
                
                Certain
                    Relationships and Related Transactions
                
                17Item
                    13.
                
                Exhibits
                
                18Item
                    14.
                
                Principal
                    Accountant Fees and Services
                
                19Index
                    to Financial Statements
                
                21




2




**PART
      I**





*Except
      for historical financial information contained herein, the matters discussed
      in
      this Form 10-KSB may be considered forward-looking statements within the meaning
      of Section 27A of the Securities Act of 1933, as amended, and
      Section 21E of the Securities Exchange Act of 1934, as amended, and subject
      to the safe harbor created by the Securities Litigation Reform Act of 1995.
      Such
      statements include declarations regarding our intent, belief, or current
      expectations and those of our management. Readers are cautioned that any such
      forward-looking statements are not guarantees of future performance and involve
      a number of risks, uncertainties and other factors, some of which are beyond
      our
      control; actual results could differ materially from those indicated by such
      forward-looking statements. Important factors that could cause actual results
      to
      differ materially from those indicated by such forward-looking statements
      include, but are not limited to: (i) that the information is of a
      preliminary nature and may be subject to further adjustment; (ii) those
      risks and uncertainties identified under “Risk Factors;” and (iii) the
      other risks detailed from time-to-time in our reports and registration
      statements filed with the Securities and Exchange Commission, or SEC. Except
      as
      required by law, we undertake no obligation to revise or update publicly any
      forward-looking statements, whether as a result of new information, future
      events or otherwise.*





**Item
      1. Business**





Independence
      Lead Mines Company (the “Company”, “We” or “Our”)) is a corporation organized
      under the laws of the State of Arizona on September 16, 1929. We are the owner
      of fifteen patented and thirteen unpatented mining claims. In addition, we
      possess a quitclaim deed to all interest in lots 5 and 8, more particularly
      described as tax parcel numbers 48N05E26-3715 and 48N05E-27-1815, which mineral
      rights were acquired through a 1997 BLM sliver land exchange, as recorded in
      the
      Shoshone County, Idaho, records as Instrument #377033. This claim group (the
      “property”) is situated Northwest of Hecla Mining Company’s Lucky Friday Mine in
      the Coeur d’Alene Mining District, Shoshone County Idaho. Adjacent is the
      community of Mullan and U.S. Interstate Highway 90.





Company
      Operations





Pursuant
      to the terms of an agreement dated February 8, 1968, among Hecla Mining Company
      (“Hecla”), Day Mines, Inc. (“Day”), Abot Mining Company (“Abot”) and the Company
      (the “Unitization Agreement”), the Eastern portion of our Property
      (approximately five-eighths of the total area of the Property) was unitized
      with
      certain adjoining and near-by properties owned by the Day and Abot into a
      unitized area, consisting of 55 claims, (known as the “DIA Area”). Under the
      terms of the Unitization Agreement, ores and minerals in place are owned by
      the
      parties thereto in the following percentages:


Day
                  (now Hecla by merger)
              
              
              47.70
              %Independence
              
              
              46.30
              %Abot
                  (now Hecla by purchase)
              
              
              6.00
              %





By
      a
      second agreement also dated February 8, 1968, (the “Lease Agreement”), Hecla
      leased the DIA Area for a period of fifty (50) years, subject to a 30-year
      extension, for the purpose of conducting mineral exploration and development
      of
      the DIA Area and mining such commercial ore as may be discovered in the DIA
      Area
      by Hecla. In the seventies Hecla performed exploration from what is called
      the
      4050 foot level. Hecla reentered this level in the early nineties performing
      additional exploration. This work led to a deeper exploration effort from the
      4900 level. In mid 1995 a 4,500 foot tunnel was started from Hecla’s Silver
      Shaft to the mineral zone. The DIA Project was divided into Phase I, II and
      III.
      By December 31, 1996 Phase I and II had been completed and a promising deposit
      had been identified. The total cost of the project from the time of its
      inception was less than $16,000,000.





The
      Lease
      Agreement provides that all costs and expenses incurred in the exploration,
      development and operation of the DIA Area are to be paid by Hecla subject to
      the
      right of Hecla to be reimbursed for such costs and expenses, together with
      all
      advance royalties paid, out of any future net profits realized from the
      operation of the DIA Area. After recovery of Hecla’s costs and expenses and
      amounts paid as advance royalties, and the establishment of a three-month
      working capital reserve, net profit royalties are to be paid to the Company
      and
      the other property owners as follows:




3





Day
                  (now Hecla by Merger)
              
              
              19.08
              %Independence
              
              
              18.52
              %Abot
                  now Hecla by purchase)
              
              
              2.40
              %





Hecla,
      as
      the lessee, will retain the remaining sixty percent (60%) of any net profits
      realized. Under the terms of the Unitization Agreement, one-half of the first
      net profit/royalties received by us is to be paid over to Day (now Hecla) until
      Day recovers the sum of $450,000. The relationship of the parties to the
      agreement may, under certain circumstances, be converted to a joint venture
      at
      the option of the


property
      owners, where after the property owners would become participating,
      non-operating working interest owners who would share profits and expenses
      in
      connection with the DIA Area in the same ratio as exists pursuant to lease
      arrangement with Hecla described above.





Until
      Hecla commences to pay net profit royalties and during such period as the Lease
      Agreement is in effect, Hecla is obligated to pay an advance royalty to us
      of
      $750 per month subject to increase to $1,500 when production for the DIA Area
      exceeds 2,000 tons per month.





Pursuant
      to the terms of the February 8, 1968, agreements, Hecla will be obligated to
      pay
      a royalty of 18.52 percent of defined net profits after Hecla has recouped
      its
      costs to explore and develop this property from the new discovery to
      us.





We
      have
      no patents, licenses, franchises or concessions, which are considered by the
      Company to be of importance. The business is not of a seasonal nature. Since
      the
      potential products are traded in the open market, we have no control over the
      competitive conditions in the industry. There is no backlog of
      orders.





There
      are
      numerous Federal and State laws and regulation related to environmental
      protection, which have direct application to mining and milling activities.
      The
      more significant of these laws deal with mined land reclamation and wastewater
      discharge from mines and milling operations. We do not believe that these laws
      and regulations as presently enacted will have a direct material adverse effect
      on its operations.





The
      western portion of our property is not under the DIA Area agreement. West
      Independence, as it is called, consists of 10 patented mining claims of which
      four (4) claims are partly included in the DIA Area agreement. Patented acres
      owned are listed below.




West
                  Independence Acres
              
              
              81.362East
                  Independence Acres
              
              
              91.808Total
                  Acres
              
              
              173.170





Since
      June 30, 1999, we have experienced substantial differences with the Lessee.
      In
      January 1997 Hecla chose to go forward with the DIA Projects Phase III and
      by
      June 1, 1998 the Project reached full production. In the first year of full
      production the Project lost $785,000 after mining and milling 257,605 tons.
      Independence requested Hecla to stop mining to prevent loss of the resource.
      Hecla’s management has refused all requests to act with prudence, and continues
      to mine at this writing. Since Hecla chose to go forward with Phase III, through
      the end of 2004 there have been approximately 1,428,000 tons mined and milled
      and all development costs have been lost. Request for prudence over the years
      have failed. During 2003 Hecla mined and milled 151,991 tons containing 15.76
      oz. silver per ton, 9.05% lead, and 2.18% zinc, and during 2004 164,624 tons
      were mined and milled assaying 13.17 oz. silver per ton, 7.78% lead, and 2.36%
      zinc. For the year 2003 the Project lost $723,147 and for the year 2004 the
      Project lost $3,000,605. The DIA Project total cost at December 31, 2004 was
      $36,353,259, and as of December 2005 Hecla has reported mining and milling
      1,723,510 tons over the life of the DIA Project. Total un-recouped project
      costs
      reached a new high of $43,279,805. We believe the record indicates the DIA
      Project was not viable to undertake with the mining method chosen and the
      existing economic conditions, and did not justify the start-up of a large mining
      operation on the Lessor’s property.





As
      of
      December 31, 2006 total un-recouped DIA Project Costs were $30,617,542. This
      represents a reduction of $12,577,900 for the year. There were 276,393 tons
      mined/milled during 2006; these tons had an average mill feed assay of 11.34
      oz.
      per ton silver, 6.57% lead, and 3.34% zinc..




4





For
      the
      year ending December 31, 2007 total un-recouped DIA Project costs were
      $14,728,656. This is a reduction for the year of $15,888,886. A total of 323,659
      tons were mined/milled during 2007; these tons had an average mill feed assay
      of
      10.27 oz. per ton silver, 6.12% lead, and 3.16% zinc.





**Asset
      Purchase Agreement**





On
      February 12, 2008, the Company, Hecla Mining Company and Hecla Merger Company
      entered into an Asset Purchase Agreement (the
      “Asset Purchase Agreement”) . Under
      the
      terms of the Asset Purchase Agreement, Hecla Merger Company will acquire
      substantially all of the Company’s assets in exchange for Hecla Mining Company’s
      common stock. The transaction is currently expected to close late in the first
      quarter or in the second quarter of 2008 and is subject to shareholder approval,
      closing conditions described in the Asset Purchase Agreement, and applicable
      regulatory approvals. The properties to be exchanged consist of all
      of
      the mining claims of the Company, the contracts for the DIA area, Independence’s
      website, Independence name and its subsidiary’s name, and various mining
      stocks.





**Subsidiary
      Company**





On
      July
      6, 2007, we formed a wholly-owned subsidiary Company named Independence
      Resources, Inc. in the State of Nevada.





**Risk
      Factors**





Our
      business, operations, and financial condition are subject to various risks.
      We
      urge you to consider the following risk factors in addition to the other
      information contained in, or incorporated by reference into, this Annual Report
      on Form 10-KSB.





***We
      are dependent on closing the Asset Purchase Agreement with Hecla Mining Company
      and Hecla Merger Company to avoid bankruptcy***





On
      February 12, 2008, we entered into a purchase agreement with Hecla Mining
      Company whereby Hecla will acquire substantially all of our assets in exchange
      for 6,936,884 shares of Hecla’s common stock. The Hecla shares will then be
      distributed to our shareholders on the basis of 1.2 shares of Hecla stock for
      every share of Independence stock held, after which the Company will go out
      of
      existence. We are currently in litigation with Hecla Mining Company over Hecla’s
      operation of the Lucky Friday Mine under the agreement covering the DIA Project
      . Hecla holds various judgments against us. If the Asset Purchase Agreement
      is
      not completed Hecla will have the ability to force us into bankruptcy or seize
      our assets to satisfy their judgments. There is also a termination fee of $1.25
      million together with Hecla’s costs that we might have to pay if the Asset
      Purchase Agreement is not completed under certain circumstances. If the Asset
      Purchase is not closed, then our shareholders face the possibility of loss
      of
      their investment.





***We
      have very limited income and resources and we expect losses to continue for
      at
      least the next three years.***




Our
      only
      continuing source of funds is an advance royalty of $1,500 per month received
      from Hecla Mining Company, which may not be sufficient to sustain our
      operations. Any additional funds required would have to come from the issuance
      of debt or the sale of our common stock. There is no guarantee that funds would
      be available from either source. If we are unsuccessful in raising additional
      funds, we may be forced to go out of existence.





***We
      have a history of net losses. We expect to continue to incur net losses, and
      we
      may not achieve or maintain profitability. Independent auditors have expressed
      substantial uncertainties for our continuation as a going
      concern*** **





We
      have
      incurred net losses each year since 2004, including net losses of approximately
      $311,534 for the year ended December 31, 2007; $73,365 for the year ended
      December 31, 2006; $85,356 for the year ended December 31, 2005; and $265,831
      for the year ended December 31,2004. As of December 31, 2007, we had an
      accumulated deficit of  $(7,123,925)
      The time required to reach profitability is highly uncertain. We may not achieve
      profitability on a sustained basis, if at all.




5





Our
      financial statements for the year ended December 31, 2007, were audited by
      our
      independent certified public accountants, whose report includes an explanatory
      paragraph stating that the financial statements have been prepared assuming
      we
      will continue as a going concern and that we have incurred operating losses
      since inception that raise substantial doubt about our ability to continue
      as a
      going concern.





We
      believe that there is substantial doubt about our ability to continue as a
      going
      concern due to our total accumulated deficit of $7,123,925 as of December 31,
      2007. Net losses may continue for at least the next several years. The presence
      and size of these potential net losses will depend, in part, on the rate of
      growth, if any, in our revenues and on the level of our expenses. The cost
      of insurance coverage and regulatory compliance continues to escalate with
      little near term relief expected. Under the new regulatory requirement, we
      will
      need to generate revenues of at least $100,000 per year
      based upon current gross margin and operating expenses to achieve profitability.
      Even if we do increase our revenues and achieve profitability, we may not be
      able to sustain profitability.





***We
      will need additional funds in the future, which may not be available to us.
      If
      we do not secure additional financing, we may be unable to develop or enhance
      our services, take advantage of future opportunities or respond to competitive
      pressures.***





We
      require substantial working capital to fund our business.  We need at least
      $8,000 in funds per month to operate. We have had significant operating losses
      and negative cash flow from operations. Additional financing may not be
      available when needed on favorable terms or at all.  Our capital
      requirements depend on several factors, including the price of metals, the
      competitive marketplace and other factors.





***Our
      operations are dependent on fluctuating metals prices over which we have no
      control.***





The
      profitability of mining operations is directly related to the market price
      of
      the metals being mined.  The market price of base and precious metals such
      as lead, copper, silver and gold fluctuate widely and is affected by numerous
      factors beyond the control of any mining company.  These factors include
      expectations with respect to the rate of inflation, the exchange rates of the
      dollar and other currencies, interest rates, global or regional political,
      economic or banking crises, and a number of other factors.  If the market
      price of lead should drop dramatically, the value of the Company’s DIA
      properties could also drop dramatically; and the Company might not be able
      to
      recover its investment in those properties.





***Because
      of the inherent dangers involved in mineral operations, there is a risk that
      we
      may incur liability or damages as we conduct our
      business.***




Conducting
      mining operations involves numerous hazards. As a result, we may become subject
      to liability for such hazards, including pollution, cave-ins and other hazards
      against which we cannot insure or against which we may elect not to insure.
      The
      payment of such liabilities may have a material adverse effect on our financial
      position.




***Investment
      in our stock is subject to wide fluctuations because it is a “Penny
      Stock”.***





Our
      stock
      is traded on the electronic over-the-counter bulletin board and is most commonly
      referred to as a “Penny Stock”. The
      Securities and Exchange Commission (SEC) has adopted regulations that define *"penny
      stock"* to
      include common stock that has a market price of less than $5.00 per share,
      subject to certain exceptions. Trading
      in Penny Stocks is often thin and characterized by wide fluctuations in trading
      prices due to many factors that may have little to do with our operations or
      business prospects.  This volatility could depress the market price of our
      common stock for reasons unrelated to operating performance.




6





***We
      may not be able to maintain the quotation of our common stock on the NASDAQ
      Bulletin Board, which would make it more difficult to dispose of our common
      stock.***





Our
      common stock is quoted on the OTC Bulletin Board ("OTCBB") maintained by
      Financial Industry Regulatory Authority (FINRA). We cannot guarantee that it
      will always be available for OTCBB quotations. The OTCBB is not an issuer
      listing service, market or exchange. Although the OTCBB does not have any
      listing requirements per se, to be eligible for quotation on the OTCBB, issuers
      must remain current in their filings with the SEC. Moreover,
      the electronic over-the-counter bulletin board (OTCBB) is not a stock exchange,
      and trading of securities on the OTCBB is often more sporadic than the trading
      of securities listed on a quotation system like Nasdaq or a stock exchange
      like
      NYSE or Amex.  Accordingly, shareholders may have difficulty reselling any
      of the shares. There can be no assurance that continual fluctuations in price
      will not occur.  It may be anticipated that any quoted market for our
      Common Shares will be subject to market trends generally, notwithstanding our
      potential success in delineating mineral resources.





**Reports
      to Securities Holders**




We
      are
      required to file annual reports on Form 10-KSB and quarterly reports on Form
      10-QSB with the Securities and Exchange Commission on a regular basis, and
      will
      be required to timely disclose certain material events (e.g., changes in
      corporate control; acquisitions or dispositions of a significant amount of
      assets other than in the ordinary course of business; and bankruptcy) in a
      current report on Form 8-K.




You
      may
      read and copy any materials we file with the Securities and Exchange Commission
      at their Public Reference Room Office, 100 F Street, NE, Room 1580, Washington,
      D.C. 20549-0102. You may obtain information on the operation of the Public
      Reference Room by calling the Securities and Exchange Commission at
      1-800-SEC-0330. Additionally, the Securities and Exchange Commission maintains
      an Internet site (http://www.sec.gov) that contains reports, proxy and
      information statements and other information regarding issuers that file
      electronically with the Securities and Exchange Commission.




**Item
      2. Properties**





The
      Company’s properties consist of 15 patented and 13 unpatented claims, other
      mining claims, consist of contracts
      for the DIA area, website, some mining stocks, bank
      accounts, and miscellaneous items. By an agreement dated February 8, 1968 among
      us and the owners of other adjacent or neighboring mining properties, we and
      the
      owners of the other properties entered into certain agreements, the general
      effect of which was to establish certain vertical boundaries between their
      respective properties and to waive certain existing or potential claims to
      extra-lateral rights to veins or ores found outside of the vertical boundaries
      of their respective properties. The property of the Company is subject to this
      agreement. Pursuant to existing law, the Company is required to pay $125 per
      claim as a rental fee in order to maintain possessory title to such properties.
      This requirement has been performed by Hecla Mining Company under the terms
      of
      the February 8, 1968 agreements described in Item 1 of this report. Further
      information regarding the properties of the Company is set forth in this report
      under “Item 1. Business” and is incorporated herein by reference.





**Item
      3. Legal Proceedings**





The
      Company is currently in litigation with Hecla Mining Company over Hecla’s
      operation of the Lucky Friday Mine under the agreement covering the DIA Project.
      As required by the terms of a 1968 Lease Agreement with Hecla Mining Company,
      our Company gave notice of termination of that agreement in early March 2009.
      This agreement covered the DIA Project, which is Hecla’s principle operation at
      the Lucky Friday Mine near Mullan, Idaho. Both parties agreed to waive the
      arbitration requirement contained in the lease and agreed to a trial without
      a
      jury.




7





A
      nine-day trial was held between the Company and Hecla Mining Company from March
      22 nd through
      April 1 st of 2004,
      and closing written arguments were submitted to the court by April
      30 th .
      Further, the court required the parties to submit to the court a written
      rebuttal to the other party’s closing arguments by May 17, 2004. On July 19,
      2004 the court ruled in favor of Hecla Mining Company. At the end of the trial
      Hecla’s management had mined and milled a reported 1,350,680 tons of mineralized
      material, thus destroying its future potential to become ore. The first District
      Court chose not to hold Hecla’s management accountable for their actions of
      waste by ruling in favor of Hecla, while at the same time, the court
      acknowledged that Hecla’s management did not act in the interest of
      Independence.





The
      Company appealed the District Court’s ruling to the Idaho Supreme Court. On
      February 6, 2006 Independence Lead Mines Company, in the case of Independence
      Lead Mines Company, (Plaintiff) vs. Hecla Mining Company (Defendant), Docket
      No.
      31042 presented oral arguments before the Idaho Supreme Court in Boise. This
      is
      a continuation of the Company’s assertion of a claim of breach of contract and
      waste, seeking declaratory and injunctive relief, relating to Hecla’s operation
      on mining claims it leased from Independence. The Idaho Supreme Court ruled
      in
      favor of Hecla and subsequently denied a motion for rehearing.





The
      Company then filed a complaint against Hecla Mining Company on December 11,
      2006
      in the United States District Court for the District of Idaho. On January 5,
      2007 the Company filed a Complaint for Rescission of Contract against Hecla
      Mining Company in the First Judicial District of the State of Idaho in and
      for
      the County of Shoshone. A hearing was held on May 9, 2007 and the judge ruled
      in
      favor of Hecla. The Company subsequently filed a petition for the appeal to
      be
      heard in federal court, which was denied. The Company has now appealed the
      case
      to the Ninth Circuit Court of Appeals in San Francisco.





**Effect
      on Litigation of Asset Purchase Agreement**





On
      February 12, 2008 the Company entered into athe Asset Purchase Agreement with
      Hecla Mining Company that will allow Hecla to acquire all of the Company’s
      mining properties and other assets.  Section
      2.13 of the Asset Purchase Agreement provides for a Stay Order for existing
      litigation between the parties, and sections 7.2.3 and 7.3.4 provide for
      dismissal of litigation and release of claims both parties have against each
      other as a condition of closing of the transaction.





**Item
      4. Submission of Matters to a Vote of Security Holders**





The
      Company did not submit any matters for shareholder approval during the fourth
      quarter of the 2007 fiscal year.





**PART
      II**





**Item
      5. Market for the Registrant’s Common Stock and Related Stockholder
      Matters**




**Market
      Information**





There
      is
      no established market for trading the Common Stock of the Company. The Common
      Stock is not regularly quoted in the automated quotation system of a registered
      securities system or association. The Common Stock of the Company is traded
      on
      the "over-the-counter" market and is listed on the OTC electronic bulletin
      board
      maintained by FINRA under the symbol of "ILDS". The following table illustrates
      the average high/low price of the Common Stock for the last two (2) fiscal
      years. The "over-the-counter" quotations do not reflect inter-dealer prices,
      retail mark-ups, commissions or actual transactions.





8




2007
              
              2006High
              
              Low
              
              High
              
              LowFirst
                  Quarter
              
              
              5.75
              
              
              3.30
              
              
              1.01
              
              
              0.75Second
                  Quarter
              
              
              5.00
              
              
              3.60
              
              
              1.99
              
              
              1.35Third
                  Quarter
              
              
              5.25
              
              
              2.50
              
              
              1.70
              
              
              1.50Fourth
                  Quarter
              
              
              4.00
              
              
              2.50
              
              
              3.50
              
              
              2.85





The
      closing price of the Company’s Common Stock as of February 29, 2008 was $11.50
      per share as quoted by the FINRA OTC BB exchange.





**Holders
      of Common Stock**





As
      of
      February 29, 2008, the Company had approximately 2,100 holders of record of
      its
      common stock, who collectively held 5,780,737 issued and outstanding shares
      of
      the Company’s Common Stock.





**Dividend
      Policy**





No
      dividends were paid by the Registrant in 2006 or 2005, and the Company has
      no
      plans to pay a dividend in the foreseeable future. Dividends undertaken by
      the
      Company are solely at the discretion of the Board of Directors.





**Forward
      Stock Split**





During
      the year ended December 31, 2007, the Company sold 180,000 shares of common
      stock at an average price of $1.50 per share. An additional 525,514 shares
      were
      issued during the year as a result of a forward stock split of one additional
      share for each ten shares held by each shareholder of the Company.





**Recent
      Sales of Unregistered Securites**





During
      2007 the Company issued securities in transactions summarized below without
      registration of the securities under the Securities Act of 1933, as amended
      (the
“1933 Act”). The Company believes that each transaction was exempt from the
      registration requirements of the Securities Act of 1933 by virtue of
      Section 4(2) thereof, Regulation D promulgated thereunder ("Regulation
      D”): On
      March
      19, 2007, Independence Lead Mines Company initiated a private offering of common
      stock to purchase, in the aggregate, 200,000 shares of common stock of
      Independence Lead Mines Company, par value $0.10, at a price of $1.50 per share.
      The offering was limited to Directors and Management of the Company. The Company
      obtained a fairness opinion in connection with the proposed offering. All shares
      purchased were restricted. All investors were required to sign a Restricted
      Stock Purchase Agreement. The Agreement generally provides that common stock
      purchased could not be sold until the agreement terminates. Generally, the
      Agreement terminates upon the occurrence of the earlier of: (i)
      the
      closing of a consolidation, merger, other reorganization, or similar transaction
      of the Company with or into any other entity or entities pursuant to which
      the
      Restricted Shareholders of the Company subsequent to the consolidation, merger,
      or other reorganization or similar transaction shall own less than fifty percent
      (50%) of the voting securities of the surviving entity; (ii) a sale, conveyance
      or disposition of all or substantially all of the assets of the Company; (iii)
      the effectuation of a transaction or series of related transactions in which
      more than fifty percent (50%) of the voting power of the corporation is disposed
      of to other than Restricted Shareholders; or (iv) forty-eight (48) months from
      the date of the Agreement. Upon termination of the Agreement, the Company agrees
      to bear all costs and expenses of transfer (excluding any income tax or
      commissions) including removal of any restrictive stock legend, issuance of
      new
      stock certificates, or legal opinions. The only transfers allowed are restricted
      to transfers occurring on the death of a purchaser or transfers to another
      purchaser in the offering. There
      was
      no placement agent. Directors purchasing stock were Bernard C. Lannen, Robert Bunde, Gordon
      Berkhaug, and Wayne Schoonmaker.





9




**Item
      6. Management’s Discussion and Analysis of Financial Condition and Results of
      Operations**





The
      following Management’s Discussion and Analysis of Financial Condition and
      Results of Operation (“MD&A”) is intended to help the reader understand our
      financial condition. MD&A is provided as a supplement to, and should be read
      in conjunction with, our financial statements and the accompanying notes
      (“Notes”).




*Cautionary
      Statement about Forward-Looking Statements*





This
      Annual Report on Form 10-KSB includes certain statements that may be deemed
      to
      be “forward-looking statements.” All statements, other than statements of
      historical facts, included in this Form 10-KSB that address activities, events
      or developments that our management expects, believes or anticipates will or
      may
      occur in the future are forward-looking statements. Such forward-looking
      statements include discussion of such matters as:





The
      amount and nature of future capital, development and exploration
      expenditures;





The
      timing of exploration activities;





Business
      strategies and development of our business plan; and





Forward-looking
      statements also typically include words such as “anticipate”, “estimate”,
“expect”, “potential”, “could” or similar words suggesting future outcomes.
      These statements are based on certain assumptions and analyses made by us in
      light of our experience and our perception of historical trends, current
      conditions, expected future developments and other factors we believe are
      appropriate in the circumstances. Such statements are subject to a number of
      assumptions, risks and uncertainties, including such factors as the volatility
      and level of metal prices, uncertainties in cash flow, expected acquisition
      benefits, exploration, mining and operating risks, competition, litigation,
      environmental matters, the potential impact of government regulations, and
      other
      matters discussed under the caption “Risk Factors,” many of which are beyond our
      control. Readers are cautioned that forward-looking statements are not
      guarantees of future performance and actual results or developments may differ
      materially from those expressed or implied in the forward-looking
      statements.





**Plan
      of Operation**





The
      Company’s plan of operation for the next twelve months, subject to maintaining
      sufficient funds, is to complete the Asset Purchase Agreement with Hecla Mining
      Company. If the Asset Purchase Agreement is completed as planned, we will have
      disposed of substantially all of our assets to Hecla Mining Company and
      subsequently dissolve.





Prior
      to
      executing the Asset Purchase Agreement, the Company was engaged in litigation
      witrh Hecla Mining Company over the Lucky Friday mine. In order to finance
      the
      legal costs associated with such litigation and appeal, the Company has raised
      capital by selling unregistered shares of its common stock in a private
      placement offering. If the Asset Purchase Agreement does not close, the Company
      anticipates that the sale of additional shares of common stock will be required
      in the next twelve months to continue funding of its litigation. The Company
      could also seek to find a joint venturer as to the DIA property. If we are
      unable to arrange additional financing or find a joint venture partner for
      the
      DIA Properties, our business plan will fail and operations will cease. The
      Company’s operations have been funded solely by the receipt of advance royalties
      from Hecla Mining Company of $1,500 per month, and from the occasional sale
      of
      the Company’s common stock in private placement. The Company has no other source
      of funds. The Company’s properties have been leased to Hecla since 1968 and
      capital improvements on the property are paid by Hecla in accordance with the
      terms of the lease. The Company has no long-term debt, and current assets
      consist almost entirely of cash.




10





**Results
      of Operations**





The
      Company had no operations in 2007 or 2006. General and administrative costs
      in
      2007 increased by $240,695 over 2006, to $319,048 as of December 31, 2007,
      from
      $78,353 as of December 31, 2006, primarily as a result of payment of directors
      fees and an increase in legal and accounting fees. The Company reported a net
      loss of $311,534 ($0.06 per share) in 2007, compared to a net loss of $73,365
      ($0.01 per share) in 2006. Net loss per share was based on weighted average
      number of shares of 5,450,319 for the year ended December 31, 2007 and 5,051,683
      for the year ended December 31, 2006.





**Liquidity
      and Capital Resources**





During
      the year ended December 31, 2007 the Company sold 180,000 shares in private
      placement transactions at an average price of $01.50 per share. The Company
      financed its obligations, primarily legal costs associated with on going
      litigation against Hecla Mining Company, during the year ended December 31,
      2007
      by the sale of these shares and by the advance royalties of $1,500 per month
      received from Hecla Mining Company.





Cash
      flows for the year ended December 31, 2007 were as follows:


During
      the twelve month period ended December 31, 2007, the Company’s cash position
      increased by $23,388. During this period the Company used $288,105 in operating
      activities and realized $270,000 from the sale of 180,000 shares of the
      Company’s common stock at an average price of $1.50 per share.





Total
      assets decreased to $180,383 as of December 31, 2007 from $191,207 as of
      December 31, 2006. Current liabilities increased to $16,458 in 2007 from $3,748
      in 2006. Net stockholders equity deficit increased to ($300,075) as of December
      31, 2007 from ($258,541) as of December 31, 2006.




The
      Company expended no amounts on capital expenditures for the period ended
      December 31, 2007. At present, other than the Asset Purchase Agreement with
      Hecla Mining Company, there are no transactions being contemplated by management
      or the board that would affect the financial condition, results of operations
      and cash flows of any asset of the Company.




**Off-Balance
      Sheet Arrangements**





The
      Company has no off-balance sheet arrangements that have or are reasonably likely
      to have a current or future effect on the Company’s financial condition, changes
      in financial condition, revenues or expenses, results of operations, liquidity,
      capital expenditures or capital resources that are material to
      investors.





**Critical
      Accounting Policies**





In
      December 2001, the SEC requested that registrants (under the Securities Exchange
      Act of 1934) list their three to five most “critical accounting polices” in the
      Management Discussion and Analysis. The SEC indicated that a “critical
      accounting policy” is one which is both important to the portrayal of a
      company’s financial condition and results, and requires management’s most
      difficult, subjective or complex judgments, often as a result of the need to
      make estimates about the effect of matters that are inherently uncertain. We
      believe that the following accounting policies fit this definition:





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make a variety of estimates and
      assumptions that affect (i) the reported amounts of assets and liabilities
      and
      disclosure of contingent assets and liabilities as of the date of the financial
      statements and (ii) the reported amounts of revenues and expenses during the
      reporting periods covered by the financial statements.





Our
      management routinely makes judgments and estimates about the effect of matters
      that are inherently uncertain. As the number of variables and assumptions
      affecting the future resolution of the uncertainties increase, these judgments
      become even more subjective and complex. Although we believe that our estimates
      and assumptions are reasonable, actual results may differ significantly from
      these estimates. Changes in estimates and assumptions based upon actual results
      may have a material impact on our results of operation and/or financial
      condition. We have identified certain accounting policies that we believe are
      most important to the portrayal of our current financial condition and results
      of operations. Our significant accounting policies are disclosed in Note 2
      to
      the financial statements included in this Annual Report on Form
      10-KSB/A.




11




The
      Company recognizes the expected future tax benefit from deferred tax assets
      when
      the tax benefit is considered to be more likely than not of being realized.
      Assessing the recoverability of deferred tax assets requires management to
      make
      significant estimates related to expectations of future taxable income.
      Estimates of future taxable income are based on forecasted cash flows and the
      application of existing tax laws in each jurisdiction. To the extent that future
      cash flows and taxable income differ significantly from estimates, the ability
      of the Company to realize deferred tax assets could be impacted. Additionally,
      future changes in tax laws in the jurisdictions in which the Company operates
      could limit the Company’s ability to obtain the future tax
      benefits.





The
      process of preparing financial statements in conformity with accounting
      principles generally accepted in the United States of America requires the
      use
      of estimates and assumptions regarding certain types of assets, liabilities,
      revenues, and expenses. Such estimates primarily relate to unsettled
      transactions and events as of the date of the financial statements. Accordingly,
      upon settlement, actual results may differ from estimated amounts.




**Mineral
      Properties**




We
      charge
      all of our mineral property acquisition and exploration costs to operations
      as
      incurred. If, in the future, we determine that a mineral property in which
      we
      have an interest can be economically developed on the basis of established
      proven and probable reserves, we will capitalize the costs incurred to develop
      the property. Such costs will be amortized using the units-of-production method
      over the estimated life of the probable reserve.




**Going
      Concern**





As
      of the
      date of this report if we are not able to complete the Asset Purchase Agreement
      with Hecla Mining Company, we may require additional capital for our operational
      activities and our ability to raise capital through future issuances of common
      stock is unknown. Obtaining additional financing and attaining profitable
      operations are necessary for us to continue operations. These factors, among
      others, raise substantial doubt about our ability to continue as a going concern
      as of the date of this report. The audited financial statements do not include
      any adjustments that may result from the outcome of these aforementioned
      uncertainties.





**Item
      7. Financial Statements**





See
      Exhibit 1, Financial Statements and Financial Statement Schedules. Such
      Financial Statements and Schedules are incorporated herein by
      reference.




**Item
      8 Changes in and Disagreements With Accountants on Accounting and Financial
      Disclosure**





None




**Item
      8A Controls and Procedures**





**Evaluation
      of Disclosure Controls and Procedures**





The
      Company’s principal executive officer and principal financial officer have
      evaluated the effectiveness of the Company’s disclosure controls and procedures
      (as such term is defined in Rules 13a-13(e) and 15d-15(e) under the Exchange
      Act) as of the end of the period covered by this report. In
      making
      this assessment, our management used the criteria set forth by the Committee
      of
      Sponsoring Organizations of the Treadway Commission (COSO) in Internal
      Control — Integrated Framework. Based on
      such evaluation, the Company’s principal executive officer and principal
      financial officer have concluded that, as of the end of such period, the
      Company’s disclosure controls and procedures are effective in recording,
      processing, summarizing and reporting, on a timely basis, information required
      to be disclosed by the Company in the reports that it files or submits under
      the
      Exchange Act.





12




**Changes
      in Internal Control Over Financial Reporting**





There
      was
      no change in the Company’s internal control over financial reporting that
      occurred during the fiscal quarter to which this report relates that has
      materially affected, or is reasonably likely to materially affect, the Company’s
      internal control over financial reporting.




**Inherent
      Limitations on Effectiveness of Controls**




The
      Company’s management does not expect that our Disclosure Controls or our
      internal control over financial reporting will prevent or detect all error
      and
      all fraud. A control system, no matter how well designed and operated, can
      provide only reasonable, not absolute, assurance that the control system’s
      objectives will be met. The design of a control system must reflect the fact
      that there are resource constraints, and the benefits of controls must be
      considered relative to their costs. Further, because of the inherent limitations
      in all control systems, no evaluation of controls can provide absolute assurance
      that misstatements due to error or fraud will not occur or that all control
      issues and instances of fraud, if any, within the Company have been detected.
      These inherent limitations include the realities that judgements in decision
      making can be faulty and that breakdowns can occur because of simple error
      or
      mistake. Controls can also be circumvented by the individual acts of some
      persons, by collusion of two or more people, or management override of the
      controls. The design of any system of controls is based in part on certain
      assumptions about the likelihood of future events, and there can be no assurance
      that any design will succeed in achieving its stated goals under all potential
      future conditions. Projections of any evaluation of controls effectiveness
      to
      future periods are subject to risks. Over time, controls may become inadequate
      because of changes in conditions or deterioration in the degree of compliance
      with policies or procedures.




**Item
      8B. Other Information**





None





**PART
      III**





**Item
      9 Directors, Executive Officers, Promoters and Control Persons and Corporate
      Governance; Compliance with Section 16(a) of the Exchange
      Act**





**Management**





Executive
      officers of the Company are elected by the Board of Directors and serve for
      a
      term of one year and until their successors have been elected and qualified
      or
      until their earlier resignation or removal by the Board of Directors. There
      are
      no family relationships among any of the directors and executive officers of
      the
      Company. None of the executive officers are currently involved in any legal
      proceedings.




13





The
      following table sets forth the names and ages of all executive officers and
      directors and the positions and offices that each person holds with the Company.


Name
                of ExecutiveOfficers
                and Directors
            
            
            
            Brief
                profile ofAnd
                Position Held
            
            Age
            
            Officers
                and DirectorsBernard
                C. Lannen
            
            71
            
            Semi
                RetiredPresident
                and Director
            
            
            
            Former
                Director of LuckyFriday
                Extension Mining CompanyWayne
                L. Schoonmaker
            
            70
            
            Certified
                Public Accountant,Secretary/Treasurer
                and Director
            
            
            
            Secretary/Treasurer
                of Metalline Mining CompanyGordon
                Berkhaug
            
            73
            
            Management
                of real estate investmentsDirector
            
            
            
            With
                experience in the mining fieldRobert
                Bunde
            
            69
            
            Semi
                retired farmer with investments inDirector
            
            
            
            the
                mining field.




**Conflict
      of Interest**




Each
      of
      our directors are involved in non-company business ventures that involve mineral
      properties and exploration. As our present business plan is focused entirely
      on
      the completing the Asset Purchase Agreement, there is no expectation of any
      conflict between our business interests and those of our directors. However,
      possible conflicts may arise in the future if we seek to acquire interests
      in
      additional mineral properties.




**Significant
      Employees**




The
      Registrant does not presently employ any person.




**Family
      Relationships**




There
      are
      no family or marital relationships that exist amongst our officers and
      directors.




**Involvement
      in Certain Legal Proceedings**




No
      event
      listed in Sub-paragraphs (1) through (4) of Subparagraph (d) of Item 401 of
      Regulation S-B, has occurred with respect to any present executive officer
      or
      director of the Registrant or any nominee for director during the past five
      years which is material to an evaluation of the ability or integrity of such
      director or officer.




**Board
      Committees**




***Nominating
      Committee***




We
      do not
      have a Nominating Committee. Since our formation we have relied upon the
      personal relationships of our President to attract individuals to our Board
      of
      Directors.




We
      do not
      have a policy regarding the consideration of any director candidates which
      may
      be recommended by our stockholders, including the minimum qualifications for
      director candidates, nor has our Board of Directors established a process for
      identifying and evaluating director nominees. We have not adopted a policy
      regarding the handling of any potential recommendation of director candidates
      by
      our stockholders, including the procedures to be followed. Our Board has not
      considered or adopted any of these policies as we have never received a
      recommendation from any stockholder for any candidate to serve on our Board
      of
      Directors. Given our relative size and lack of directors and officers insurance
      coverage, we do not anticipate that any of our stockholders will make such
      a
      recommendation in the near future. While there have been no nominations of
      additional directors proposed, in the event such a proposal is made, all members
      of our Board will participate in the consideration of director
      nominees.




14




***Compensation
      Committee***




We
      do not
      have a Compensation Committee. We pay no salaries, and have no
      benefits.




***Audit
      Committee***





The
      Company’s Board of Directors is responsible for the oversight and management of
      the Company. The Board does not have a separately-designated standing audit
      committee because the entire Board of Directors acts as the Company’s audit
      committee. The Board of Directors has determined that none of the Board of
      Directors can be classified as an "audit committee financial expert" as defined
      in Item 401(e) of Regulation S-B. The Board of Directors does not contain a
      member that can be classified as an "audit committee financial expert" under
      the
      referenced definition. The Board of Directors believes that attracting and
      retaining board members that could be classified as an "audit committee
      financial expert" is unlikely due to the high cost of such Director candidates.




**Section
      16(a) Beneficial Ownership Reporting Compliance**




Section
      16(a) of the Securities Exchange Act of 1934 requires the Company’s directors
      and executive officers and persons who beneficially owns more than ten percent
      of a registered class of the Company’s equity securities to file with the SEC
      initial reports of ownership and reports of change in ownership of common stock
      and other equity securities of the Company.  Officers, directors and
      greater than ten percent shareholders are required by SEC regulations to furnish
      the Company with copies of all Section 16(a) forms they file.  To our
      knowledge, the following persons have failed to file, on a timely basis, the
      identified reports required by Section 16(a) of the Exchange Act during fiscal
      year ended December 31, 2007:




Name
                and principal position
            
            Number
                of
              late
                reports
            
            Transactions
                not
              timely
                reported
            
            Known
                failures to
              file
                a required formBernard
                C. Lannen
            
            1
            
            3/07
                Purchase
            
            1Robert
                Bunde
            
            1
            
            3/07
                Purchase
            
            1Wayne
                L. Schoonmaker
            
            1
            
            3/07
                Purchase
            
            1Gordon
                Berkhaug
            
            1
            
            3/07
                Purchase
            
            1





**Code
      of Ethics**





The
      Company has not yet adopted a code of ethics that applies to the Company’s
      principal executive officer, and principal financial officer because of the
      limited size of the Company and its management team.





**Item
      10. Executive Compensation**





The
      directors and officers of this company are not considered employees. There
      was
      no remuneration paid to any of the directors and officers of this company during
      the fiscal year ended December 31, 2006. On March 14, 2007, we paid our
      directors $142,080 for director fees for the years 1998 through 2005 . On
      September 25, 2007, we paid our directors a total of $19,200 as director fees
      for the year 2006. Our
      executive officers did not receive any compensation whatsoever (other than
      in
      their capacity as directors) for the years ended December 31, 2006 and 2007,
      nor
      do they currently receive any compensation. We do not have any agreements or
      understandings that would change the terms of compensation during the course
      of
      the year.





15




Compensation
      to directors also included reimbursement of out-of-pocket expenses that are
      incurred in connection with the directors’ duties associated with the Company's
      business. There is currently no other compensation arrangements for the
      Company’s directors. The information specified concerning items of Director
      Compensation for the fiscal year ended December 31, 2007 is provided in the
      following Director Compensation Table:


DIRECTOR
                  COMPENSATIONName
              
              Fees
                  Earned or Paid in Cash ($)
              
              Stock
                  Awards ($)
              
              Option
                  Awards ($)
              
              Non-Equity
                  Incentive Plan Compensation
                ($)
              
              Nonqualified
                  Deferred Compensation ($)
              
              All
                  Other Compensation ($)(1)
              
              Total
                  ($)(a)
              
              (b)
              
              (c)
              
              (d)
              
              (e)
              
              (f)
              
              (g)
              
              (h)Bernard
                  C. Lannen
              
              $
              109,200
              
              $
              0
              
              
              
              
              $
              0
              
              $
              0
              
              $
              4,909
              
              $
              114,109Wayne
                  Schoonmaker
              
              $
              26,640
              
              $
              0
              
              
              
              
              $
              0
              
              $
              0
              
              $
              600
              
              $
              27,240Robert
                  Bunde
              
              $
              8,880
              
              $
              0
              
              
              
              
              $
              0
              
              $
              0
              
              $
              1,086
              
              $
              9,966Forrest
                  Godde
              
              $
              7,840
              
              $
              0
              
              
              
              
              $
              0
              
              $
              0
              
              
              
              
              $
              7,840Gordon
                  Berkhaug
              
              $
              8,880
              
              $
              0
              
              
              
              
              $
              0
              
              $
              0
              
              
              
              
              $
              8,880




(1)
            Amounts
                represent reimbursement of out-of-pocket expenses related to directors’
                duties associated with the Company's business (ie. travel expenses
                for
                attending Company Director’s
                Meetings).




There
      are
      no contractual arrangements with any member of the Board of
      Directors.





No
      retirement benefit, bonus, stock option or other remuneration plans are in
      effect with respect to the Company’s officers and directors.





**Employment
      Contracts and Termination of Employment or Change of
      Control**





We
      have
      no plans or arrangements in respect of remuneration received or that may be
      received by our executive officers to compensate such officers in the event
      of
      termination of employment (as a result of resignation or retirement) or change
      of control transaction.




**Item
      11. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters**





The
      following table sets forth as of February 29, 2008 the common stock ownership
      of
      each person known by the Company to be the beneficial owner of five percent
      or
      more of the Company’s common stock, each director individually, and all officers
      and directors of the Company as a group. Each person has sole voting and
      investment power with respect to the shares of common stock shown, unless
      otherwise noted, and all ownership is of record and beneficial.





16





Shares
                of
            
            
            ApproximateCommon
                Stock
            
            
            Percentage
                ofName
            
            
            Beneficially
                Owned
            
            
            ClassU.S.
              Silver Corporation
            
            
            314,921
            
            
            5.45Bernard
                C. Lannen
            
            
            418,426
            
            
            7.24Wayne
                L. Schoonmaker
            
            
            20,900
            
            
            *Gordon
                Berkhaug
            
            
            (1)
                228,593
            
            
            3.95Robert
                Bunde
            
            
            (2)
                261,800
            
            
            4.53




All
      directors and executive officers of the Company as a group (4 persons in the
      group) own 929,719 shares or approximately 16.08 percent of the Company’s
      outstanding voting securities.





*
      Less
      than 1.0%




(1)
      Includes 89,690 shares held by Mr. Berkhaug in the Damon Berkhaug Trust as
      trustee.




(2)
      Includes 79,200 shares held by Mr. Bunde as guardian for minors.





**ITEM
      12.**  **CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS**





**Shareholders
      Agreement**





As
      a
      requirement of the Asset Purchase Agreement, Independence’s Directors and
      Officers, namely, Bernard C. Lannen, Wayne Schoonmaker, Robert Bunde, and Gordon
      Berkhaug , executed a Shareholders agreement with Hecla. The Shareholders’
Agreement requires them to vote all of the shares of Independence Common Stock
      that they directly, indirectly or beneficially own or control at the special
      meeting in favor of the Asset Purchase Agreement proposal. The share
      beneficially owned or controlled by Bernard C. Lannen, Wayne Schoonmaker, Robert
      Bunde, and Gordon Berkhaug , represent 929,719 shares of common stock or
      approximately 16.08% of the outstanding shares of Independence Common Stock
      as
      of the date of the Shareholders Agreement, i.e. February 12, 2008.





**Directors’
      Stock Purchases**





On
      March
      19, 2007, Independence Lead Mines Company initiated a private offering of common
      stock to purchase, in the aggregate, 200,000 shares of common stock of
      Independence Lead Mines Company, par value $0.10, at a price of $1.50 per share.
      The offering was limited to Directors and Management. The securities purchased
      are subject to a 3 year restriction, which condition terminates: terminates
      upon
      the occurrence of the earlier of: (i)
      the
      closing of a consolidation, merger, other reorganization, or similar transaction
      of the Company with or into any other entity or entities pursuant to which
      the
      Restricted Shareholders of the Company subsequent to the consolidation, merger,
      or other reorganization or similar transaction shall own less than fifty percent
      (50%) of the voting securities of the surviving entity; (ii) a sale, conveyance
      or disposition of all or substantially all of the assets of the Company; (iii)
      the effectuation of a transaction or series of related transactions in which
      more than fifty percent (50%) of the voting power of the corporation is disposed
      of to other than Restricted Shareholders; or (iv) thirty-six (36) months from
      the date of the Agreement.




17




**Director
      Independence**





We
      currently do not have any independent directors, as the term “independent” is
      defined by the rules of the Nasdaq Stock Market (Note: Our shares of common
      stock are not listed on NASDAQ or any other national securities exchange and
      this reference is used for definition purposes only).





**PART
      IV**


**ITEM
      13.**  **EXHIBITS**





**Documents
      filed as pa** r **t
      of this report on Form 10-KSB or incorporated by
      reference:**





(1)   Our
      financial statements on page 21 of this report.




(2)   Financial
      Statement Schedules (omitted because they are either not required, are not
      applicable, or the required information is disclosed in the notes to the
      financial statements or related notes).




(3)   The
      following exhibits are filed with this Annual Report on Form 10-KSB or
      incorporated by reference.




**EXHIBITS**




**Exhibit**
              **Number******
            
            
            
            **Description
                of Exhibits**3.1
            
            *
            
            Articles
                of Incorporation , dated 9/16/29 previously filed as Exhibit 3.1
                to Form
                10-K for 1983 and incorporated by reference herein.3.2
            
            *
            
            Articles
                of Amendment, dated 2/11/32. previously filed as Exhibit 3.1 to Form
                10-K
                for 1983 and incorporated by reference herein.3.3
            
            *
            
            Articles
                of Amendment. Dated 4/20/68 previously filed as Exhibit 3.1 to Form
                10-K
                for 1983 and incorporated by reference herein.3.4
            
            *
            
            Articles
                of I Amendment, dated 8/28/79 previously filed as Exhibit 3.1 to
                Form 10-K
                for 1983 and incorporated by reference herein.3.5
            
            **
            
            Articles
                of Amendment, dated 7/30/973.6
            
            **
            
            Articles
                of Amendment, dated 9/23/053.7
            
            *
            
            Bylaws
                of Independence Lead Mines Company, previously filed as Exhibit 3.2to
                Form 10-K for 1983 and incorporated by reference herein.4.1
            
            *
            
            Specimen
                of Certificate of Common Stock, par value $0.1010.1
            
            *
            
            Asset
                Purchase Agreement, dated February 12, 2008, between and among theCompany,
                Hecla Mining Company and Hecla Merger Company10.2
            
            *
            
            Unitization
                Agreement dated February 8, 1968 among Day Mines, Inc., Independence
                Lead
                Mines Company and Abot Mining Company, previously filed as Exhibit
                10.1 to
                Form 10-K for 1983 and incorporated by reference herein10.3
            
            *
            
            Agreement
                dated February 8, 1968 among Hecla Mining Company, Day Mines, Inc.,
                Independence Lead Mines Company and Abot Mining Company, previously
                filed
                as Exhibit 10.2 to Form 10-K for 1983 and incorporated by reference
                herein.10.4
            
            *
            
            Agreement
                dated February 8, 1968 among Independence Lead Mines Company, Day
                Mines,
                Inc., Abot Mining Company, Wall Street Mining Company, Hunter Creek
                Mining
                Company, Lucky Friday Extension Mining Company, Hecla Mining Company
                and
                the Bunker Hill Mining Company relating to extralateral and intralimital
                rights to mining claims, previously filed as Exhibit 10.7 to Form
                10-K for
                1983 and incorporated by reference herein.21
            
            *
            
            Subsidiaries
                of the Registrant.31.1
            
            **
            
            Certification
                of Chief Executive Officer of Periodic Report pursuant to
                Rule 13a-14(a) and Rule 15d-14(a)(Section 302 of the
                Sarbanes- Oxley Act of 2002).




18




31.2
            
            **
            
            Certification
                of Chief Financial Officer of Periodic Report pursuant to
                Rule 13a-14(a) and Rule 15d-14(a)(Section 302 of the
                Sarbanes- Oxley Act of 2002).32.1
            
            **
            
            Certificate
                of Principal Executive Officer pursuant to 18 U.S.C. 1350
                (Section 906 of the Sarbanes-Oxley Act of 2002).32.2
            
            **
            
            Certificate
                of Principal Financial Officer pursuant to 18 U.S.C. 1350
                (Section 906 of the Sarbanes-Oxley Act of
                2002).







*
            Previously
                filed.





**
            Filed
                herewith.


.


**DOCUMENTS
      INCORPORATED BY REFERENCE**




Portions
      of the documents listed below have been incorporated by reference into the
      indicated parts of this report, as specified in the responses to the item
      numbers involved. Form
      8-K,
      as filed February 13, 2008 and February 21, 2008, and as amended March 12,
      2008




**Item
      14. Principal Accountant Fees and Services.**




**Auditor
      Fees**




The
      following presents fees for professional audit services rendered by
      LeMaster & Daniels PLLC, for the audit or review of the Company's
      financial statements for the years ended December 31, 2007 and
      December 31, 2006, and fees billed for other services rendered by
      LeMaster & Daniels, during those periods.




** The
      following table presents fees billed to us during December 31, 2005 and 2006,
      for professional services provided by Lamaster & Daniel


Year
                  Ended
              
              December
                  31, 2007
              
              December
                  31, 2006Audit
                  fees (1)
              
              $
              26,000
              
              $
              21,000Audit-related
                  fees (2)
              
              
              -0-
              
              
              -0-Tax
                  fees (3)
              
              $
              3,300
              
              
              -0-All
                  other fees (4)
              
              
              -0-
              
              
              -0-Total
                  Fees
              
              $
              29,300
              
              $
              21,000-




19




** (1)
      Audit
      fees consist of fees billed for professional services provided in connection
      with the audit of the Company’s financial statements and reviews of our
      quarterly financial statements.




(2)
      Audit-related fees consist of assurance and related services that include,
      but
      are not limited to, internal control reviews, attest services not required
      by
      statute or regulation and consultation concerning financial accounting and
      reporting standards.




(3)
      Tax
      fees consist of the aggregate fees billed for professional services for
      corporate tax advice and tax planning.




(4)
      All
      other fees consist of fees billed for products and services other than the
      services reported above.




The
      Board
      of Directors reviewed the audit and tax services rendered by LeMaster &
Daniels PLLC . and concluded that such services were compatible with maintaining
      the auditors’ independence. We
      do not
      rely on pre-approval policies and procedures. We
      do not
      use LeMaster & Daniels PLLC. for financial information system design
      and implementation. We do not engage LeMaster & Daniels PLLC to provide
      compliance outsourcing services.




**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
      the
      registrant has duly caused this report to be sign on its behalf by the
      undersigned, thereunto duly authorized.




INDEPENDENCE
                LEAD MINES COMPANYBy:
            /s/ Bernard
              C. LannenBernard
                C. Lannen, its President and
              Chief
                Administrative Officer
              Dated:
                March24,
                2008


By:
            /s/ Wayne
              L.
              SchoonmakerWayne
              L. Schoonmaker, its PrincipalAccounting Officer
              Dated: March 24,
                2008




Pursuant
      to the requirement of the Securities Exchange Act of 1934, this report has
      been
      signed below by the following persons on behalf of the Registrant and in the
      capacities and on the dates indicated.




By:
            /s/ Bernard
              C. Lannen
            
            By:
            /s/ Gordon
              BerkhaugBernard
              C. Lannen
            
            
            Gordon
              BerkhaugPresident/Director
              Date:
                March 13,
                2008
            
            
            Director
              Date:
                March 13, 2008  
  By:
              /s/ Wayne
                L.
                Schoonmaker
              
              By:
              /s/ Robert
                BundeWayne
                L. Schoonmaker
              
              
              Robert
                BundeSecretary & Treasurer/Director
                Date: March 24,
                  2008
              
              
              Director
                Date:
                  March 24, 2008


20


**INDEPENDENCE
      LEAD MINES COMPANY**


**INDEX
      TO FINANCIAL STATEMENTS**


PageCONSOLIDATED
                  FINANCIAL STATEMENTS:Report
                  of Independent Registered Public Accounting Firm
              
              
              F/S-1Consolidated
                  Balance Sheets as of December 31, 2007 andDecember
                  31, 2006
              
              
              F/S-2Consolidated
                  Statements of Operations for the years Ended December 31,
                  2007and
                  December 31, 2006
              
              
              F/S-3Consolidated
                  Statements of Changes in Stockholders’ Equity for the years
                  endedDecember
                  31, 2007 and December 31, 2006
              
              
              F/S-4Consolidated
                  Statements of Cash flows for the years ended December 31,
                  2007and
                  December 31, 2006
              
              
              .F/S-5Notes
                  to Consolidated Financial Statements
              
              
              F/S-6
 21




**Report
      of Independent**


**Registered
      Public Accounting Firm**





To
      the
      Board of Directors


Independence
      Lead Mines Company


Wallace,
      Idaho





We
      have
      audited the consolidated balance sheets of Independence Lead Mines Company
      and
      subsidiary as of December 31, 2007 and 2006, and the related consolidated
      statements of operations, changes in stockholders’ equity, and cash flows for
      the years then ended. These financial statements are the responsibility of
      the
      Company’s management. Our responsibility is to express an opinion on these
      financial statements based on our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provided a
      reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Independence Lead Mines Company
      and
      subsidiary as of December 31, 2007 and 2006, and the results of their operations
      and their cash flows for the years then ended, in conformity with U.S. generally
      accepted accounting principles.





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a


going
      concern. As discussed in note 2 to the financial statements, the Company has
      incurred recurring losses from operations, and its total liabilities exceed
      its
      total assets. This raises substantial doubt about the Company’s ability to
      continue as a going concern. Management’s plans in regard to these matters are
      also described in Note 2 to the financial statements. The financial statements
      do not include any adjustments that might result from the outcome of this
      uncertainty.








/s/
      LeMaster & Daniels PLLC





Spokane,
      Washington


March
      13,
      2008





**F/S-1**




**I** **NDEPENDENCE
      LEAD MINES COMPANY**





**CONSOLIDATED
      BALANCE SHEETS**


**December
      31, 2007 and 2006**





2007
            
            2006ASSETSCURRENT
                ASSETSCash
                and cash equivalents
            
            $
            171,434
            
            $
            148,046Certificate
                of deposit
            
            
            0
            
            
            40,129Royalties
                receivable
            
            
            1,500
            
            
            1,500Marketable
                securities
            
            
            1,870
            
            
            1,532Prepaid
                expenses
            
            
            5,579
            
            
            0Total
                current assets
            
            
            180,383
            
            
            191,207Total
                Assets
            
            $
            180,383
            
            $
            191,207




LIABILITIES
                AND STOCKHOLDERS’
                EQUITYCURRENT
                LIABILITIESAccounts
                payable - trade
            
            $
            15,372
            
            $
            3,748Accounts
                payable - related parties
            
            
            1,086
            
            
            0Total
                current liabilities
            
            
            16,458
            
            
            3,748DEFERRED
                INCOME
            
            
            464,000
            
            
            446,000Total
                Liabilities
            
            
            480,458
            
            
            449,748COMMITMENTSSTOCKHOLDERS’
                EQUITYCommon
                stock, $0.10 par value; authorized10,000,000
                shares; issued 5,075,793 shares and5,780,737
                shares, respectively
            
            
            578,074
            
            
            507,579Additional
                Paid in Capital
            
            
            6,245,776
            
            
            4,206,9726,823,850
            
            
            4,714,551Less
                accumulated deficit
            
            
            (7,123,925
            )
            
            (4,973,092
            )Total
                Stockholders’ equity
            
            
            (300,075
            )
            
            (258,541
            )Total
                Liabilities and Stockholders’ equity
            
            $
            180,383
            
            $
            191,207





The
      accompanying notes are an integral part of these financial
      statements.





**F/S-2**





**INDEPENDENCE
      LEAD MINES COMPANY**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**For
      the years ended December 31, 2007 and 2006**


2007
                
                2006Revenue
                
                $
                0
                
                $
                0ExpensesLicenses
                    and fees
                
                
                209
                
                
                130Office
                    and administration
                
                
                1,337
                
                
                785Office
                    services
                
                
                600
                
                
                600Shareholder
                    Relations
                
                
                6,814
                
                
                3,302Consulting
                
                
                10,142
                
                
                1,098Directors’
                    Fees
                
                
                161,280
                
                
                0Transportation
                
                
                4,297
                
                
                3,816Accounting
                
                
                49,978
                
                
                10,095Legal
                
                
                84,391
                
                
                58,527Total
                    Expenses
                
                
                319,048
                
                
                78,353Loss
                    from Operations
                
                
                (319,048
                )
                
                (78,353
                )Other
                    Income and (Expense)Interest,
                    net
                
                
                7,175
                
                
                4,268Unrealized
                    gain (loss) on FMV of investments
                
                
                339
                
                
                720Total
                    Other Income (Expense)
                
                
                7,514
                
                
                4,988Net
                    Loss
                
                $
                (311,534
                )
                $
                (73,365
                )LOSS
                    PER SHARE
                
                $
                (0.06
                )
                $
                (0.01
                )Weighted
                    average commonshares
                    outstanding
                
                
                5,450,319
                
                
                5,051,683


The
      accompanying notes are an integral part of these financial
      statements.


**F/S-3**


**INDEPENDENCE
      LEAD MINES COMPANY**





**CONSOLIDATED
      STATEMENTS OF CHANGES IN STOCKHOLDEERS’ EQUITY**


**For
      the Years Ended December 31, 2007 and 2006**


Common
                  StockNumber
                  Of Shares
              
              Amount
              
              Additional
                  Paid-In
                  Capital
              
              Accumulated
                  Deficit
              
              TotalBalances,December
                  31,2005
              
              
              4,975,793
              
              $
              497,579
              
              $
              4,144,472
              
              $
              (4,899,727
              )
              $
              (257,676
              )Common
                  stock sold
              
              
              100,000
              
              
              10,000
              
              
              62,500
              
              
              0
              
              
              72,500Net
                  loss for year endedDecember
                  31, 2006
              
              
              0
              
              
              0
              
              
              0
              
              
              (73,365
              )
              
              (73,365
              )Balances,December
                  31,2006
              
              
              5,075,793
              
              
              507,579
              
              
              4,206,972
              
              
              (
                  4,973,092
              )
              
              (258,541
              )Common
                  stock sold
              
              
              180,000
              
              
              18,000
              
              
              252,000
              
              
              0
              
              
              270,000Stock
                  dividend
              
              
              525,514
              
              
              52,552
              
              
              1,786,747
              
              
              (
                  1,839,299
              )
              
              0Adjust
                  shares outstanding
              
              
              (
                  570
              )
              
              (
                  57
              )
              
              57
              
              
              0
              
              
              0Net
                  loss for year ended December 31, 2007
              
              
              0
              
              
              0
              
              
              0
              
              
              (311,534
              )
              
              (311,534)Balances,
                  December 31, 2007
              
              
              5,780,737
              
              $
              578,074
              
              $
              6,245,776
              
              $
              (7,123,925
              )
              $
              (300,075
              )




The
      accompanying notes are an integral part of these financial
      statements.




F/S-4




**INDEPENDENCE
      LEAD MINES COMPANY**





**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**For
      the years ended December 31, 2007 and 2006**


INCREASE
                  (DECREASE) IN CASH AND
              
              2007
              
              2006CASH
                  EQUIVALENTSCASH
                  FLOWS FROM OPERATING ACTIVITIESNet
                  loss
              
              $
              (311,534
              )
              $
              (73,365
              )Adjustment
                  to reconcile net Loss tonet
                  cash used in Operating Activities:Changes
                  in cash due to changes inassets
                  and liabilities:Prepaid
                  expenses
              
              
              (5,579
              )
              
              472Unrealized
                  (gain) on investments
              
              
              (338
              )
              
              (720
              )Accounts
                  payable
              
              
              12,710
              
              
              (2,234
              )Deferred
                  income
              
              
              18,000
              
              
              18,000Interest
                  accrued on certificate of deposit
              
              
              (1,364
              )
              
              0Net
                  cash used in operating activities
              
              
              (288,105
              )
              
              (57,847
              )CASH
                  FLOWS FROM INVESTING ACTIVITIESPurchase
                  of certificate of deposit
              
              
              (31,066
              )
              
              (10,129
              )Redemption
                  of certificate of deposit
              
              
              72,559
              
              
              0Net
                  cash provided by (used in) in investing activities
              
              
              41,493
              
              
              (10,129
              )CASH
                  FLOWS FROM FINANCING ACTIVITIESProceeds
                  from sale of common stock
              
              
              270,000
              
              
              72,500Net
                  cash provided by financing activity
              
              
              270.000
              
              
              72,500Net
                  increase (decrease) in cash
              
              
              23,388
              
              
              4,524CASH
                  AND CASH EQUIVALENTS, beginning of year
              
              
              148,046
              
              
              143,522CASH
                  AND CASH EQUIVALENTS, end of year
              
              $
              171,434
              
              $
              148,046
  SUPPLEMENTARY
                  DISCLOSURE OF CASH FLOW INFORMATION2007
              
              
              2006Interest
                  paid
              
              $
              0
              
              $
              0Taxes
                  paid - State of Idaho
              
              
              30
              
              
              30Federal
              
              
              0
              
              
              0Non-cash
                  financing activity:Stock
                  dividend
              
              
              1,839,299
              
              
              0




The
      accompanying notes are an integral part of these financial
      statements.





F/S-5





**INDEPENDENCE
      LEAD MINES COMPANY**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
      31, 2007 and 2006**





**NOTE
      1 - ORGANIZATION AND DESCRIPTION OF BUSINESS**





Independence
      Lead Mines Company (“the Company”) is a corporation organized under the laws of
      the State of Arizona on September 16, 1929. The Company is the owner of fifteen
      patented and thirteen unpatented mining claims. In addition, the Company has
      ownership by quitclaim deed to all interest in lots 5 and 8, more particularly
      described as tax parcel numbers 48N05E26-3715 and 48N05E-27-1815, which mineral
      rights were acquired through a 1997 BLM sliver land exchange, as recorded in
      the
      Shoshone County, Idaho, records as Instrument #377033. This claim group (the
      “property”) is situated northwest of Hecla Mining Company’s Lucky Friday Mine in
      the Coeur d’Alene Mining district, Shoshone County, Idaho. A portion of the
      Company’s property is part of the “DIA Area” which is currently being developed
      and mined by Hecla Mining Company. The Company’s only recurring source of funds
      has been a monthly advance royalty from Hecla Mining Company of $1,500.





The
      Company is currently in litigation with Hecla Mining Company over Hecla’s
      operation of the Lucky Friday Mine under the agreement covering the DIA Project.
      A nine-day trial was held from March 22 nd through
      April 1 st of 2004,
      and on July 19, 2004 the court ruled in favor of Hecla Mining Company.
      Independence appealed the District Court’s ruling to the Idaho Supreme Court,
      and on April 24, 2006 the court ruled against the Company. On May 26, 2006,
      the
      Company requested that the Court grant rehearing of the case, and the court
      again decided against Independence. The Company then filed a complaint against
      Hecla Mining Company on December 11, 2006 in the United States District Court
      for the District of Idaho, and on January 5, 2007 the Company filed a Complaint
      for Rescission of Contract against Hecla in the First Judicial District of
      the
      State of Idaho. A hearing was held on May 9, 2007 and the judge ruled in favor
      of Hecla. The Company subsequently filed a petition for the appeal to be heard
      in federal court, which was denied. The Company has now filed an appeal with
      the
      Ninth Circuit Court of Appeals in San Francisco.





On
      February 12, 2008 the Company entered into an agreement with Hecla Mining
      Company that will allow Hecla to acquire all of Independence Lead’s mining
      properties and other assets. In return, Hecla will distribute 6,936,884 of
      its
      common shares to the Company. The Company will then liquidate and distribute
      the
      Hecla shares to Independence Lead shareholders at the rate of 1.2 Hecla shares
      for each share of Independence Lead. The transaction is subject to the approval
      of the Company’s shareholders and applicable securities laws. Upon successful
      conclusion of the terms of the agreement, there will be a dismissal of the
      pending litigation and appeals.





The
      Company’s exploration activities never developed any commercial ore deposits
      and, effectively in 1968 Management decided to abandon or sell its mineral
      properties and rights, and favorably position itself to seek other profitable
      business opportunities. Accordingly, the Company is not considered to be in
      the
      development stage.




During
      2007, the Company incorporated Independence Resources, Inc., a wholly-owned
      subsidiary, which had no activity during 2007.




**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





This
      summary of significant accounting policies is presented to assist in
      understanding the financial statements. The financial statements and notes
      are
      representations of the Company’s management, which is responsible for their
      integrity and objectivity. These accounting policies conform to accounting
      principles generally accepted in the U.S. and have been consistently applied
      in
      the preparation of the financial statements




F/S-6


.


Accounting
      Method


The
      Company’s financial statements are prepared using the accrual method of
      accounting.





Consolidated
      Financial Statements


For
      2007,
      the Company’s wholly owned subsidiary was consolidated in the Company’s
      financial statements. Inter-company accounts were eliminated in the
      consolidation.





Accounts
      Receivable


The
      Company carries its receivables at cost. On a periodic basis, the Company
      evaluates its receivables and determines if an allowance for doubtful accounts
      is necessary, and based on a history of past write-offs and collections and
      current credit conditions an allowance is deemed unnecessary.





Cash
      and Cash Equivalents


For
      purposes of the statement of cash flows, the Company considers all bank
      accounts, certificates of deposit, money market accounts and short-term debt
      securities purchased with a maturity of three months or less to be cash
      equivalents.




Concentration
      of Risk


The
      Company maintains its cash in two commercial depository accounts and two
      certificates of deposits. These accounts are insured by the Federal Deposit
      Insurance Corporation (FDIC) for up to $100,000 per institution. Balances in
      the
      Company’s accounts occasionally exceed the FDIC insurance limits, and those
      amounts are considered uninsured.





Investment


The
      investment in common stock of Hecla Mining Company is stated at its fair value.
      The investment is considered to be aa trading security.





Environmental
      Matters


The
      Company owns mineral property interests on certain public and private lands
      in
      Idaho. The Company’s properties have been subject to a variety of federal and
      state regulations governing land use and environmental matters. The Company’s
      management believes it has been in substantial compliance with all such
      regulations, and is unaware of any pending action or proceeding relating to
      regulatory matters that would affect the financial position of the Company.
      The
      Company’s management acknowledges, however, that the possibility exists that the
      Company may be subject to environmental liabilities associated with its prior
      activities in the unforeseeable future, although the likelihood of such is
      deemed remote and the amount and nature of the liabilities is impossible to
      estimate.





Deferred
      Income


Advance
      royalties received, subject to reimbursement to the payor under certain
      circumstances (as described above), are reported as deferred income in the
      accompanying financial statements.





Derivative
      Instruments


The
      Financial Accounting Standards Board issued Statement of Financial Accounting
      Standards No. 133, “Accounting for Derivative Instruments and Hedging
      Activities,” (hereinafter “SFAS No. 133”) as amended by SFAS No. 137,
“Accounting for Derivative Instruments and Hedging Activities - Deferral of
      the
      Effective Date of FASB No. 133,” and SFAS No. 149, “Amendment of Statement 133
      on Derivative Instruments and Hedging Activities.” These statements establish
      accounting and reporting standards for


derivative
      instruments, including certain derivative instruments embedded in other
      contracts, and for


hedging
      activities. They require that an entity recognize all derivatives as either
      assets or liabilities in the balance sheet and measure those instruments at
      fair
      value.





If
      certain conditions are met, a derivative may be specifically designated as
      a
      hedge, the objective of which is to match the timing of gain or loss recognition
      on the hedging derivative with the recognition of




F/S-7




(i)
      the
      changes in the fair value of the hedged asset or liability that are attributable
      to the hedged risk or (ii) the earnings effect of the hedged forecasted
      transaction. For a derivative not designated as a hedging instrument, the gain
      or loss is recognized in income in the period of change.





Historically,
      the Company has not entered into derivatives contracts to hedge existing risks
      or for speculative purposes.





During
      the years ended December 31, 2007 and 2006, the Company has not engaged in
      any
      transactions that would be considered derivative instruments or hedging
      activities.





Loss
      per Share


Loss
      per
      share (basic) is computed by dividing net loss by the weighted average number
      of
      common


shares
      outstanding during the year. Loss per share (diluted) is computed by dividing
      net loss by the sum


of
      the
      weighted average number of common shares outstanding and the additional common
      shares that would have been outstanding if potential common shares had been
      issued. At December 31, 2007 and 2006, the Company had no potential common
      shares, and only loss per share (basic) is reported for the years then
      ended.





Use
      of
      Estimates


The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from those
      estimates.





Fair
      Value of Financial Instruments


The
      carrying amounts of financial instruments, including cash and cash equivalents
      and payables approximated their fair values as of December 31, 2007 and
      2006.





Going
      Concern


As
      shown
      in the accompanying financial statements, the Company has no revenues, has
      incurred a net loss of $311,534 for the year ended December 31, 2007 and has
      an
      accumulated deficit of $7,123,925. These factors raise the possibility that
      the
      Company may be unable to continue in existence. The financial statements do
      not
      include any adjustments related to the recoverability and classification of
      recorded assets, or the amounts and classification of liabilities that might
      be
      necessary in the event the Company cannot continue in existence.





The
      Company’s management believes that future private placements of stock and
      continuing contracted agreements will generate sufficient cash for the Company
      to continue to operate based on current expense projections. The Company is
      currently operating on the cash proceeds of a private placement and the
      continuing advance royalties of $1,500 per month.





Reclassification


Certain
      balances from prior year financial statements have been reclassified to conform
      with the current year presentation.





Provision
      for Taxes


Income
      taxes are provided based upon the liability method of accounting pursuant to
      Statement of Financial Accounting Standards No. 109, “Accounting for Income
      Taxes” (hereinafter “SFAS No. 109”). Under this approach, deferred income taxes
      are recorded to reflect the tax consequences in future years of differences
      between the tax basis of assets and liabilities and their financial reporting
      amounts at each year-end. A valuation allowance is recorded against deferred
      tax
      assets if management does not believe the Company has met the “more likely than
      not” standard imposed by SFAS No. 109 to allow recognition




F/S-8




of
      such
      an asset. As management of the Company cannot determine that it is more likely
      than not that the Company will realize the benefit of the net deferred tax
      asset, there is a valuation allowance equal to the net deferred tax
      asset.





Recent
      Accounting Pronouncements





In
      September 2006, the Financial Accounting Standards Board issued Statement of
      Financial Accounting


Standards
      No. 157, “Fair Value Measurements” ( hereinafter “SFAS No. 157”), which defines
      fair value, establishes a framework for measuring fair value in generally
      accepted accounting principles (GAAP), and expands disclosures about fair value
      measurements. Where applicable, SFAS No. 157 simplifies and codifies related
      guidance within GAAP and does not require any new fair value measurements.
      SFAS
      No. 157 is effective for financial statements issued for fiscal years beginning
      after November 15, 2007,


and
      interim periods within those fiscal years. Earlier adoption is encouraged.
      The
      Company does not


expect
      the adoption of SFAS No. 157 to have a significant effect on its financial
      position or results of operation.





In
      June
      2006, the Financial Accounting Standards Board issued FASB Interpretation No.
      48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB
      Statement No. 109” (hereinafter “FIN 48”),


which
      prescribes a recognition threshold and measurement attribute for the financial
      statement recognition and measurement of a tax position taken or expected to
      be
      taken in a tax return. FIN 48 also provides guidance on de-recognition,
      classification, interest and penalties, accounting in interim periods,
      disclosure and transition. FIN 48 is effective for fiscal years beginning after
      December 15, 2006. The adoption of FIN 48 on January 1, 2007 did not have an
      impact on the 2007 financial statements or disclosures.





In
      March
      2006, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards No. 156, “Accounting for Servicing of Financial Assets-an
      amendment of FASB Statement No.


140.”
      This statement requires an entity to recognize a servicing asset or servicing
      liability each time it undertakes an obligation to service a financial asset
      by
      entering into a servicing contract in any of the following situations: a
      transfer of the servicer’s financial assets that meets the requirements for sale
      accounting; a transfer of the servicer’s financial assets to a qualifying
      special-purpose entity in a guaranteed mortgage securitization in which the
      transferor retains all of the resulting securities and classifies them as either
      available-for-sale securities or trading securities in accordance with FASB
      Statement No. 115; or an acquisition or assumption of an obligation to service
      a
      financial asset that does not relate to financial assets of the servicer or
      its
      consolidated affiliates. The statement also requires all separately recognized
      servicing assets and servicing liabilities to be initially measured at fair
      value, if practicable and permits an entity to choose either the amortization
      or
      fair value method for subsequent measurement of each class of servicing assets
      and liabilities. This statement is effective for fiscal years beginning after
      September 15, 2006 with early adoption permitted as of the beginning of an
      entity’s fiscal year. The adoption of this statement had no impact on the
      Company’s financial condition or results of operations.





In
      February 2006, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 155, “Accounting for Certain Hybrid Financial
      Instruments, an amendment of FASB Standards No. 133 and 140” (hereafter “SFAS
      No. 155”). This statement established the accounting for certain derivatives
      embedded in other instruments. It simplifies accounting for certain hybrid
      financial instruments by permitting fair value remeasurement for any hybrid
      instrument that contains an embedded derivative that otherwise would require
      bifurcation under SFAS No. 133 as well as eliminating a restriction of the
      passive derivative instruments that a qualifying special-purpose entity (“SFE”)
      may hold under SFAS No. 140. This statement allows a public entity to
      irrevocably elect to initially and subsequently measure a hybrid instrument
      that
      would be required to be separated into a host contract and derivative in its
      entirety at fair value (with changes in fair value recognized in earnings)
      so
      long as that




F/S-9




instrument
      is not designated as a hedging instrument pursuant to the statement. SFAS No.
      140 previously prohibited a qualifying special-purpose entity from holding
      a
      derivative financial instrument that pertains to a beneficial interest other
      than another derivative financial instrument. This statement is effective for
      fiscal years beginning after September 15, 2006, with early adoption permitted
      as of the beginning of an entity’s fiscal year. The adoption of this statement
      had no impact on the Company’s financial condition or results of
      operations.





**NOTE
      3 - PROPERTY**





The
      Company has 15 patented and 13 unpatented claims situated in the Hunter Mining
      District, Shoshone County, Idaho. In addition, the Company has ownership by
      quitclaim deed to all interest in lots 5 and 8, more particularly described
      as
      tax parcel numbers 48N05E26-3715 and 48N05E-27-1815, which mineral rights were
      acquired through a 1997 BLM sliver land exchange, as recorded in the Shoshone
      County, Idaho, records as Instrument #377033. On February 8, 1968, the Company
      entered into an agreement with Day Mines, Inc., Abot Mining Company and Hecla
      Mining Company whereby certain properties of the four companies were combined
      for purposes of exploration and development. These properties were referred
      to
      as the DIA Area and include 9 patented and 13 unpatented claims of Independence
      Lead Mines Company. Hecla Mining Company is the exploring and developing
      company. The DIA agreement allows Hecla Mining Company to recover all of its
      exploration and development cost, advance royalties paid, and to build a three
      months’ reserve for working capital prior to splitting profits. Independence is
      to receive 18.52% of the profits, and under the terms of the DIA agreement
      the
      Company has been receiving an advance of $1,500 for each month 2,000 tons of
      ore
      are mined.





**NOTE
      4 - INCOME TAXES**





At
      December 31, 2007 and 2006, the Company had deferred tax assets of approximately
      $589,000 and $540,000, respectively, arising from net operating loss carryovers
      and write-off of impaired assets. Management has determined that it is more
      likely than not that these deferred tax assets will not be realized, and
      therefore a valuation allowance equal to the full amount of the deferred tax
      asset has been established at both December 31, 2007 and 2006. For the years
      ended December 31, 2007 and 2006, the income tax provisions differed from the
      expected amounts using current federal statutory rates because of the effects
      of
      the change in the deferred tax asset valuation allowance each year. At December
      31, 2007, the Company has tax basis net operating loss carryovers totaling
      approximately $787,000, which expire in the years 2022 through
      2027.





Net
      deferred tax assets consisted of the following components at December 31, 2007
      and 2006:


2007
              
              2006Write
                  off of impaired assets
              
              $
              470,000
              
              $
              470,000Net
                  operating loss carryovers
              
              
              119,000
              
              
              70,000Gross
                  deferred tax assets
              
              
              589,000
              
              
              540,000Less
                  valuation allowance
              
              
              (589,000
              )
              
              (540,000
              )Net
                  deferred tax assets
              
              $
              0
              
              $
              0





**NOTE
      5 - RELATED PARTY TRANSACTIONS**





During
      the years ended December 31, 2007 and December 31, 2006, payments of $600 for
      office services were paid or accrued to Wayne Schoonmaker, an officer, director
      and shareholder of the Company.





In
      March
      2007 the Board of Directors of Independence Lead Mines Company approved the
      payment of directors’ fees to five directors, which include the president and
      secretary-treasurer. The amounts




F/S-10




approved
      for the directors’ fees totaled approximately $142,000 which was paid for
      services rendered


from
      1998
      through 2005. The fees paid to four of the directors were then used to purchase
      additional common stock in the Company. In September 2007 the Board of Directors
      of the Company approved the payment of directors’ fees to four directors, which
      included the president and secretary-treasurer, for services rendered in 2006.
      These total fees paid were $19,200.





**NOTE
      6 - COMMON STOCK**





In
      September 1997 the capitalization of the Company was increased from 4,000,000
      shares to 5,000,000 shares of $1.00 par value common stock. In September 2005
      the capitalization of the Company was increased from 5,000,000 shares of $1.00
      par value common stock to 10,000,000 shares of $0.10 par value common stock.
      The
      common stock and additional paid-in capital accounts have been restated to
      reflect the change in capitalization.





During
      the year ended December 31, 2007 the Company sold 180,000 shares of common
      stock
      in private placement to officers and directors of the Company at a price of
      $1.50 per share.





Per
      special notice dated March 28, 2007 the Board of Directors of the Company
      approved the payment of a forward stock split to all shareholders, of one
      additional share of common stock for each ten shares of common stock held.
      There
      is no record date, and the stock will be payable as original share certificates
      are received by the Company’s transfer agent. NASD has deemed the action
      effective July 11, 2007 and 525,514 shares were reserved for payment of the
      stock split. The forward split was deemed a stock dividend and the fair value
      of
      common shares issued ($1,839,299) was charged to accumulated deficit for
      2007.




During
      the year ended December 31, 2006 the Company sold 100,000 shares of common
      stock
      in private placement at an average of $0.725 per share.





**NOTE
      7 - SUBSEQUENT EVENTS**





On
      February 12, 2008 the Company entered into an agreement with Hecla Mining
      Company that will allow Hecla to acquire all of Independence Lead’s mining
      properties and other assets. In return, Hecla will distribute 6,936,884 of
      its
      common shares to the Company. The Company will then liquidate and distribute
      the
      Hecla shares to Independence Lead shareholders at the rate of 1.2 Hecla shares
      for each share of Independence Lead. The agreement includes a $1.25 million
      break-up fee if the transaction does not close for certain reasons. If approved,
      the closing is expected to be completed late in the first quarter or early
      in
      the second quarter of 2008. The transaction is subject to the approval of the
      Company’s shareholders and applicable securities laws.





In
      January 2008 the Board of Directors of the Company approved the payment of
      directors’ fees to four directors, which include the president and
      secretary-treasurer, for services rendered in 2007. The total fees paid were
      $19,200.





**NOTE
      9 - COMMITMENT**





The
      Company has entered into an agreement with a law firm to pay $100,000 for legal
      fees relating to the Hecla litigation matter. A payment of $50,000 was made
      in
      September 2006 and the remaining $50,000 was paid in the first quarter of the
      2007 fiscal year. Under the terms of the agreement, the fees are earned when
      paid and are not refundable. Accordingly, the payments were charged to expense
      when paid.




F/S-11